A term insurance policy with maturity benefits is an insurance policy for a specific term or period of time. It helps cover expenses incurred by your loved ones in case of the policyholder's sudden demise but if the policyholder survives the term and the policy matures, he/she will get certain maturity benefits such as the return of premium paid towards the policy and many more features depending upon the policy you opt for.
A pure-term plan is the purest form of life insurance where the insurance company or the insurer offers life coverage for a set period of time. If the insured unfortunately dies during this period, the sum assured is paid to the nominee but if the insured survives the term, nothing would be paid to them. On the contrary, under term plans with maturity benefits or return of premium, the insured can avail benefits such as bonuses or refund of premiums.
A term plan with maturity benefits is nothing but a traditional term insurance plan with unique benefits. In majority of the cases, term insurance is paid out in case of an untimely death of the insured and if the person survives the specified time period no money is returned or given back to the insurance holder.
There are certain term insurances that offer maturity benefits, such as the term plan known as TROP i.e. Term Return Of Premium, wherein the policyholder is given an additional feature of return of premium. In TROP, if the insured survives the term, all the premiums (excluding GST) that the insured paid during the policy period are returned back to the insured at the time of maturity.
This TROP plan offers comprehensive coverage and is best for people looking for savings and protection. It encourages people who generally wonâ€™t buy a term plan thinking if they survive they will lose all the money paid towards the term insurance plan.
TROP is for people who think that having a term plan goes to waste if the insured survives the policy term. The return of premium feature in TROP makes it unique from the regular term insurance policies.
Since TROP offers such a feature, the premium that needs to be paid by the policyholder is comparatively higher than the pure term insurance. It will be suitable for those who can easily afford to pay the premiums on time to avail of this benefit.
A term plan with maturity benefits has the following advantages:
While term insurance with maturity benefits such as term insurance with return of premium, has a lot of benefits, it also has certain disadvantages. The following are the disadvantages of this plan:
Check and compare plans from 21 IRDAI-approved term insurance providers before purchasing a term plan.
Term insurance with maturity benefits does not just give you a death benefit but it also gives you a survival benefit which is not available in pure term insurance. This is a major advantage while opting for a policy, but it does have disadvantages as well. If you are someone who is looking for an investment aspect, it would be wise not to opt for this plan as there are a lot of other ways to multiply your money but if you are someone who can easily afford to pay the high premiums and think this plan suits you better, just go for it.
It is necessary to do a thorough research before opting for the policy. There are various policies available in the market that look like term insurance with maturity benefits but are actually not. PolicyX.com can help you compare and buy insurance which best fits your needs without having to physically go somewhere.